Exactly eight years ago, the equities market was following a similar pattern as what we have seen so far in August and September 2016. In 2008, it dropped very sharply in the middle of September, a drop very similar to what many are expecting to see this month, which we at Z3 are calling a hangman. If this pattern repeats itself this month, we would see the second hangman within the next few days.
The graph shown above includes three weeks of Dow index closing prices from September 8-26, 2008. Corresponding dates for 2016 are shown below the 2008 dates, but the dates don’t have to line up as long as the pattern holds up. Dates can be pushed forward or backwards.
Here are some things to watch for:
- Beware of the weekend because the drop started on a Monday, September 15.
- The market dropped 4.4% the first day and closed at the low.
- The total drop took 3 trading days to complete and closed very close to the low on the third day.
- Beware of the head fake because the market bounced back up 1.6% the second day before continuing the drop on the third day, down 4.1% (based on intraday highs and lows).
- The market bounced back very fast, up 4.4% the fourth day and another 4.2% the fifth day.
- It finished right where it started. The intraday high on the fifth day, which was Friday September 19, was almost identical to the intraday high the previous Friday, September 12.
- After recovering 100% of the drop, the volatility continued and most of the recovery was lost over the next three trading days.
None of these things have to happen again this year, but they might because historical patterns often repeat.
Author: James Bailey
James Bailey is a blogger, business owner, husband and father of two grown children. In 1982, he surrendered his life to the Lord Jesus Christ. In 2012, he founded Z3news.com to broadcast the message of salvation by reporting end time news before it happens.
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